Indonesian reform plans may boost economy longer-term

2015 ◽  
Keyword(s):  
Monetary Policy ◽  
Financial Market ◽  
Foreign Investment ◽  
Institutional Reform ◽  
Market Volatility ◽  
Power Balance ◽  
Gdp Growth ◽  
Infrastructure Development ◽  
Content Type ◽  
Investor Confidence

Subject Jokowi's reform packages. Significance President Joko 'Jokowi' Widodo last week announced the first of three economic packages designed to re-invigorate the economy and attract foreign investment. The remaining two packages will be announced later this month and in November respectively. Similar packages have been devised by past administrations, but to little effect. To gain investor confidence, Jokowi will need to specify how his administration intends to implement its plans. Impacts Financial market volatility will continue until US monetary policy begins to normalise (probably no earlier than December). The power balance in Jokowi's cabinet militates against institutional reform. Policies to boost infrastructure development promise longer-term gain, but little boost to 2015 GDP growth.

Indonesia's new cabinet gives modest boost to economy

2015 ◽  
Keyword(s):  
Economic Performance ◽  
Central Government ◽  
Gdp Growth ◽  
Content Type ◽  
Investor Confidence ◽  
Vested Interests ◽  
Precipitous Decline ◽  
Resource Sector

Significance In a long-awaited move to stimulate the economy and restore investor confidence, Jokowi replaced five ministers and reassigned one. The reshuffle is not surprising given Indonesia's sub-par economic performance (4.7% GDP growth in the second quarter and 4.6% in the first); a precipitous decline of its currency (the rupiah has hit a 15-year low); a stalled infrastructure drive; and the declining popularity of the president. Impacts Central government infrastructure spending is likely to rise, boosting growth by late 2015 and early 2016. Vested interests within government will impede Jokowi's attempt to curb corruption, but future scandals will erode his popularity. Prospects for overhauling military-executive ties are grim despite the military's links to illicit activities in the resource sector.

Greek recovery will attract institutional investors

2019 ◽  
Keyword(s):  
Monetary Policy ◽  
Financial Institutions ◽  
Capital Markets ◽  
Institutional Investors ◽  
Yield Curve ◽  
Strict Adherence ◽  
Content Type ◽  
Investor Confidence ◽  
The Way

Significance The new issue’s main purpose was to build up a benchmark yield curve to facilitate the sovereign’s future access to capital markets and, ultimately, pave the way for the broader participation of Greek corporates and financial institutions. Impacts Tightening EU monetary policy and/or adverse developments in EU peripheral economies should push Greek yields and spreads upwards. Investor confidence will hinge on the government’s strict adherence to reform and ability to resolve banks’ non-performing loans. The upcoming elections in Greece may destabilise the issuance schedule.

Iran will struggle to create a ‘resistance economy’

2017 ◽  
Keyword(s):  
Central Asia ◽  
Fiscal Year ◽  
Gdp Growth ◽  
Crowding Out ◽  
Medium Term ◽  
Content Type ◽  
Investor Confidence ◽  
Real Gdp ◽  
Defence Spending ◽  
Supreme Leader

Subject The Iranian budget. Significance Speeches marking the Iranian New Year (Nowruz) on March 21 highlighted disagreements between Supreme Leader Ali Khamenei and President Hassan Rouhani. While both promoted a ‘resistance economy’, each meant something different. The recently published budget for the 2017-18 fiscal year highlights divisions and linkages between the two philosophies. Impacts Real GDP growth in 2017 will not be much above 3.0% and will rise to 4.5% in the medium term. Rising tensions with Washington will further boost defence spending, crowding out development. Additional US congressional sanctions, or even threat of sanctions, are likely to depress investor confidence. New transport links to Central Asia may significantly increase trade.

The ECB will set the speed of global credit tightening

2018 ◽  
Keyword(s):  
Financial Market ◽  
Euro Area ◽  
Market Volatility ◽  
Government Bonds ◽  
Content Type ◽  
Bank Of Japan ◽  
Global Growth

Significance The ECB's plan could tip the scales towards tighter credit conditions globally. However, there are concerns about global growth -- particularly in the euro-area -- and government bonds are proving extremely sensitive to hawkish policy, fuelling financial market volatility. Impacts The VIX index of anticipated US equities volatility is back near a record low, but volatility may rise and remain higher than recent years. Fed rate hikes and US growth outpacing the euro-area will strengthen the dollar although the euro briefly rose on the news of ECB tapering. The ECB trails the Fed by some years in policy tightening and forming a plan for unwinding QE; this divergence will also boost the dollar. The Bank of Japan is buying vast quantities of government bonds and has no plans to remove stimulus as inflation is far below the 2% target. Investors are appreciating and trusting Fed Chair Jay Powell's attempts to speak plainly and less formulaically than predecessor Yellen.

Peruvian growth will again disappoint this year

2019 ◽  
Keyword(s):  
Foreign Investment ◽  
Public Investment ◽  
Domestic Demand ◽  
Balance Of Payments ◽  
Export Market ◽  
Gdp Growth ◽  
Content Type ◽  
High Level ◽  
Poverty Levels ◽  
Roll Back

Subject Outlook for Peruvian growth. Significance With both external and domestic demand ebbing in the first few months of 2019, forecasters are reducing their estimates for GDP growth in 2019. Peru is exposed to a slowdown in growth in China, since it is by far its biggest export market and the main source of foreign investment. Public investment also appears to be slower than in previous years. Impacts Slower growth will impact negatively on employment and risk pushing up poverty levels. Business groups will increase their pressure on government to roll back social legislation on matters like labour stability. The relatively high level of reserves will cushion Peru from balance of payments pressures.

Prospects for emerging economies to end-2019

2019 ◽  
Keyword(s):  
Monetary Policy ◽  
Fiscal Policy ◽  
Emerging Markets ◽  
Trade Policy ◽  
Emerging Economies ◽  
World Trade ◽  
Gdp Growth ◽  
Content Type ◽  
Us Trade Policy ◽  
Policy Shift

Subject Prospects for emerging economies to end-2019. Significance US trade policy is hardening and while the direction remains uncertain, a sustained softening seems unlikely. Monetary policy is shifting towards easing in many emerging markets (EMs) and some are expanding fiscal policy. However, the policy shift will not compensate for weaker world trade and EM GDP growth is expected to slow from 4.5% last year, already a three-year low, to closer to the 4.3% seen in 2015 or even weaker.

Papua New Guinea's economy is set to weaken

2019 ◽  
Keyword(s):  
Natural Gas ◽  
Papua New Guinea ◽  
Foreign Investment ◽  
Aggregate Demand ◽  
New Guinea ◽  
Macroeconomic Policy ◽  
Gas Oil ◽  
Content Type ◽  
Investor Confidence ◽  
Economic Outlook

Subject The economic outlook for Papua New Guinea. Significance The outlook for the leading commodity exports from Papua New Guinea (PNG) -- natural gas, oil and gold -- remains positive, but by most counts the economy is deteriorating and will worsen as Asia’s aggregate demand for resource commodities falls. Impacts The new government may pass legislation to obtain higher returns to PNG from foreign investment. Perceived corruption and declining governance will directly damage investor confidence. As financial and economic pressures mount, there may well be changes in macroeconomic policy.

scholarly journals Central bank's communication and markets' reactions: Polish evidence

2021 ◽  
Vol ahead-of-print (ahead-of-print) ◽  
Author(s):  
Janusz Brzeszczyński ◽  
Jerzy Gajdka ◽  
Tomasz Schabek ◽  
Ali M Kutan
Keyword(s):  
Monetary Policy ◽  
Foreign Exchange ◽  
Financial Market ◽  
Foreign Exchange Market ◽  
Emerging Market ◽  
Public Information ◽  
Exchange Market ◽  
Market Segments ◽  
Content Type ◽  
The Impact

PurposeThis study contributes to the pool of knowledge about the impact of monetary policy communication of central banks on financial instruments' prices and assets' value in emerging markets.Design/methodology/approachEmpirical analysis is executed using the National Bank of Poland (NBP) announcements about its monetary policy covering the data from the broad financial market in its three main segments: stock market, foreign exchange market and bonds market. The reactions are measured relative to the changes in the NBP announcements and also with respect to investors' expectations. Autoregressive conditional heteroscedasticity (ARCH) models with dummy variables are used as the main methodological tool.FindingsBonds market and foreign exchange market are the most sensitive market segments, while interest rate and money supply are the most influential types of announcements. The changes of the revealed new macroeconomic figures had more impact on assets' prices movements than the deviations from their expectations. Moreover, greater diversity of the Monetary Policy Council (MPC) members' opinions on the voted motions, captured in the MPC voting reports, is associated with more cases of statistically significant NBP communication events.Practical implicationsThe findings have direct relevance for fund managers, portfolio analysts, investors and also for financial market regulators.Originality/valueThe results provide novel evidence about how the emerging financial market responds to monetary policy announcements. They help understand the nature of the impact of public information on financial assets' valuation and on movements of their prices, analysed comprehensively in three market segments, in the emerging market environment.

Weak economy prompts foreign outreach in Mongolia

2015 ◽  
Keyword(s):  
Foreign Investment ◽  
Direct Democracy ◽  
Negative Impact ◽  
Text Message ◽  
Gdp Growth ◽  
Legal Process ◽  
Content Type ◽  
External Conditions ◽  
Mining Projects ◽  
The Government

Significance GDP growth has slowed from a peak of 17.5% in 2011 to around 7.0% last year. Foreign investment, which has driven growth, has fallen steeply and external conditions have weakened. Legislative moves to revive interest have had little to no effect. The government in Ulan Bator is talking to the IMF about possible assistance, and Mongolians have been polled by text message in a bid to confirm popular support for getting crucial mining projects moving again. Impacts Ulan Bator has to address the recent jailing of foreign nationals and the negative impact on Mongolia's image. The text message referendum suggests refinement is needed to make future initiatives in direct democracy credible. Criticism of the legal process leading to imprisonment of former mining executives could result in changes to the law.

India's GDP rebase may boost investor confidence

2015 ◽  
Keyword(s):  
Slow Growth ◽  
National Income ◽  
The Political ◽  
Gdp Growth ◽  
National Accounts ◽  
Fiscal Consolidation ◽  
Content Type ◽  
Investor Confidence ◽  
Central Statistical ◽  
Manufacturing Data

Subject GDP rebase and its impact on policy. Significance The Central Statistical Organisation's (CSO) new estimates of national income using the April 2011-March 2012 fiscal as the base year suggest that GDP in 2013-14 grew at 6.9%. This compares with growth of 5.0% computed on the basis of the earlier National Accounts series with 2004-05 as base. Further, on the new estimates, GDP growth rose from 5.1% to 6.9% between 2012-13 and 2013-14, compared with 4.8% to 5.0% based on the earlier series, making 2013-14 a year of robust recovery rather than persisting slow growth. Impacts Revision of manufacturing data could help Modi's 'Make in India' campaign, provided it is infused with policy substance. The Congress's leadership vacuum will prevent the party from harnessing the political benefits of the rebase. The government's fiscal consolidation target for 2014-15 could now be easier to achieve.

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